Chorus announces plan to repay company financing and reduce debt

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR MORE UNITED STATES WIRE SERVICES/

HALIFAX, NS, December 9, 2024 /CNW/ – Chorus Aviation Inc. (TSX: CHR) (“Choir“or the”Business“) today announced its intention to repay its corporate financings to help optimize the Company’s capital structure, following the closing of the sale of Chorus’ Regional Aircraft Leasing segment (the “Transaction“) on December 6, 2024. As previously announced, Chorus intends to use the net proceeds from the transaction to repay at maturity, repurchase or repurchase the Company’s corporate financings, including the 5.75 senior unsecured debentures % outstanding due December 31, 2024 (THE “Series A Debentures“), 6.00% senior unsecured convertible debentures maturing June 30, 2026 (THE “Series B Debentures“), 5.75% senior unsecured debentures maturing June 30, 2027 (THE “Series C Debentures“) and the preferred shares series 1 of the capital of the Company (the “Series 1 Preferred Shares“).

“Following the recent closing of the sale of the RAL segment, we are now implementing our previously announced plan to reduce debt on the company’s balance sheet,” said Colin CoppPresident and CEO, Chorus. “This is an important step as we reposition Chorus for a stronger future.”

Change of control offers

Chorus will today issue a notice of change of control pursuant to the indentures governing the Series B Debentures (72.5 million Canadian dollars aggregate capital) and the Series C debentures (85.0 million Canadian dollars aggregate principal amount) (the Series B Debentures and the Series C Debentures collectively referred to as the “Debentures“) and initiate purchase offers (collectively, the “Change of control Offers“) the entire outstanding aggregate principal amount of the debentures at a price equal to: (i) in the case of Series B debentures, 100% of the principal amount thereof redeemed, and (ii) in the case of debentures Series C, 101% of the principal amount redeemed, plus, in each case, accrued and unpaid interest, if any, on these debentures up to February 3, 2025the date of purchase.

Each change of control offer may be accepted by the debenture holders up to 5:00 p.m. (Toronto hour) on January 27, 2025 (THE “Expiration time“).

If 90% or more of the aggregate principal amount of the outstanding Series B Debentures or Series C Debentures has been tendered for redemption on or before the Expiration Time, Chorus will have the right to redeem all of the outstanding Series B Debentures or Series C Debentures. remaining outstanding Series B Debentures or Series C Debentures, if any, in accordance with the terms of the Debenture Indentures. If Chorus elects to exercise this right with respect to any series of Debentures, Chorus intends to apply to the TSX for delisting of that series.

If Chorus does not acquire all of the Debentures pursuant to the Change of Control Offers and related repurchase rights, the unpurchased Debentures will remain outstanding. Chorus, in addition to other redemption rights set forth in the relevant trust indentures, will retain the option to redeem all remaining Series B Debentures at any time on or after June 30, 2025 to the principal amount plus accrued and unpaid interest thereon and on the Series C debentures at any time from March 31, 2026 to the principal amount plus accrued and unpaid interest thereon.

For further details regarding the terms of the Change of Control Offers and the Redemption of the Debentures, please refer to the Notice of Change of Control and Offer to Purchase, which has been mailed to the registered holders of the Debentures and which is available under Chorus’ SEDAR+ profile at www.sedarplus.ca.

Neither Chorus, the board of directors of Chorus, nor any of their respective representatives make any recommendation as to whether holders of Debentures should tender or tender their Debentures pursuant to the Change of Control Offers. Each Debenture Holder must make a decision whether to deposit or tender its Debentures under the applicable Change of Control Offer based on its particular circumstances. Holders of Debentures are urged to carefully evaluate all information regarding the Debentures and the change of control offers, to consult their own investment, legal, financial, tax and other advisors, and to make their own decision whether to tender or deposit their debentures.

Maturity of Series A Debentures

Of the December 6, 2024there was 86.2 million Canadian dollars aggregate principal amount of outstanding Series A Debentures. The Series A Debentures will mature in accordance with the terms of the indenture governing the Series A Debentures on December 31, 2024 and will be delisted at the close of the stock market on December 31, 2024.

Redemption of Series 1 Preferred Shares

Chorus also announced today that it will repurchase all of its issued and outstanding Series 1 Preferred Shares on December 31, 2024in accordance with their terms. There are currently 300,000 Series 1 preferred shares issued and outstanding. The Series 1 Preferred Shares will be repurchased at a price of approximately $1,210.90 per share for an overall redemption price of US $363,270,833. Official notice of the redemption has been provided to the holders of the Series 1 Preferred Shares.

Forward-looking information

This press release contains forward-looking information and statements within the meaning of applicable securities laws (collectively, “forward-looking information“). Examples of forward-looking information contained in this press release include statements and expectations regarding the change of control offers, the maturity of the Series A Debentures, the redemption of the Series 1 Preferred Shares and anticipated enhancements of the financial condition of Chorus – the information sought involves significant risks and uncertainties which could cause actual results to differ materially from those anticipated, including, but not limited to, the level of participation in the offerings of Chorus. change of control, the potential impact of consummation of the transaction on relationships, including with employees, suppliers, customers, investors and other capital providers; emergence of disputes in the context of the capacity purchase contract between Chorus subsidiary Jazz Aviation LP and Air Canada; the financial situation of Canada; any default by Chorus under the debt covenants; and changes in the law. Actual results could differ materially from those described in the forward-looking information as a result of known or unknown risks, including, but not limited to, the risk factors described in Chorus’s public disclosure filing available under Chorus’ profile on SEDAR+ at www.sedarplus.ca. .

The forward-looking information contained in this press release represents Chorus’s expectations as of the date of this press release (or as of the date on which it is otherwise stated) and is subject to change after such date. Chorus disclaims any intention or obligation to update or revise any forward-looking information as a result of new information, subsequent events or otherwise, except as required by applicable securities laws. Readers are cautioned that the above factors and risks are not exhaustive.

About Chorus Aviation Inc.

Chorus is a Canadian company focused on aviation service businesses. Our operating subsidiaries are: Jazz Aviation, the largest regional operator in Canada and provider of regional air services under the Air Canada Express brand; Voyageur Aviation, a leading provider of specialty charter services, aircraft modifications, parts supply and in-service support services; and Cygnet Aviation Academy, a cutting-edge accredited training academy that prepares pilots for direct entry into airlines. Together, Chorus subsidiaries provide services that encompass every stage of an aircraft’s life cycle, including: aircraft acquisition and leasing; aircraft refurbishment, engineering, modification, repurposing and transition; contract theft; maintenance, dismantling and supply of aircraft parts and components; and pilot training.

Chorus’ Class A Variable Voting Shares and Class B Voting Shares trade on the Toronto Stock Exchange under the symbol “CHR”. 5.75% Senior Unsecured Chorus Debentures Maturing December 31, 20246.00% Senior Unsecured Convertible Debentures Maturing June 30, 2026and 5.75% senior unsecured debentures maturing June 30, 2027 trade on the Toronto Stock Exchange under the trading symbols “CHR.DB.A”, “CHR.DB.B” and “CHR.DB.C” respectively. For more information about Chorus, please visit www.chorusaviation.com.

SOURCE Chorus Aviation Inc.

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